Exchange rates and commodity prices: the case of Australian metal exports

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Title

Exchange rates and commodity prices: the case of Australian metal exports

Author

Swift, Robyn Frances

Journal Name

Applied Economics

Editor

Mark P. Taylor

Year Published

2001

Place of publication

UK

Publisher

Routledge

Abstract

Exporters of homogeneous commodities are usually regarded as ‘price takers’ who operate in perfectly competitive international markets, so that the pass-through of exchange rate changes to foreign-currency prices must be zero. However, many Australian commodities are subject to influences that may produce more complex pricing strategies, for example, markets in which Australia is a dominant exporter, or where there are few buyers and sellers due to the presence of large multi-national corporations. This study uses multivariate cointegration techniques to examine the pricing of Australian metal exports, with particular emphasis on the degree and timing of the pass-through of exchange rate and other changes.